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Demographic Environment

Population changes: The world population has increased from 7.0 billion [6] in 2011 to 7.2 billion
in 2014. As the population increases, the demand for the power also increases. Whereas more
than more than 1 billion people still has no access to power [5]. Every country is trying to get the
accessibility of power for its people which show a great potential available in the world market
for power companies. Caterpillar has a great opportunity in the power sector to grow.
Geographical Distribution: The Geographical distribution of the market and customers play an
important role in the performance of an organization like Caterpillar. There are so many natural
resources are hidden in the world. Many countries are exploring these hidden natural resources in
their geographical structure of their country. These countries are intending to explore of such
resources available with them which is not possible with the mining, exploration and construction
equipments. Because of the increase in such exploration activities the demand of the products of
Caterpillar is increasing day by day. Compare to 2013, in 2014 there is almost 42% increase in the
list of visitors of different demographic groups (from 70000 in 2013 [5] to 100000 in 2014 [1])
list which clearly shows the demand is continuously increasing day by day.
Income: The world economy is getting better day and day and hence, increasing the purchase
power of people. As the income level increases, the lifestyle also improves and people want
better infrastructure of their region. That ultimately increases the demand of the energy,
construction equipments, financial products etc. Caterpillar is required to understand the
betterment of the world economy and accordingly decide their strategy to get the better response
from the market in terms of market share, sales revenue and profit margin.

Economic Environment

Economical Factors - The development of emerging markets in the world specially North America,
Latin America, Europe, Asia, and the Middle East and Africa have provided the company with an
opportunity to expand their business within the region. In this context, Caterpillar should increase
their business into developing new market like in Brazil, Russia, and china, India etc to explore the
available resources and coping up with the needs of faster growing markets of developing countries or
regions. In those countries the products that Caterpillar is selling are needed to create infrastructure in
order to develop cities, roads, for exploration of mines etc.